GAME UK loses landmark retail lawsuit, must pay £3 million in back-rent

GAME UK has lost a legal battle involving missed rent payments while the company was in administration in 2012. The result could set a precedent, seeing as administration is typically engineered so that firms don’t have to pay rent while proceedings are active.

Retail Week reports that GAME UK must now pay the consortium of landlords £3 million in back-rent, which it claims is already accounted for. The verdict is now being appealed.

In a statement on the matter, a GAME spokesperson explained, “The real ramification of this decision is, however, that it will have a significant financial impact on all landlords, tenants and insolvency practitioners involved in current and future business insolvencies in this country.”

Hammerson’s head of credit control Duncan Grubb added, “The previous system was deeply unsatisfactory for both landlords and insolvency practitioners and this judgement provides a workable, common sense resolution to the payment of rent as an administration expense.

“This judgement will significantly change the relationship between landlords and insolvency practitioners, and will hopefully lead to more collaboration when dealing with critical situations. Corporate restructuring will now be focused purely on trading patterns and the viability of the ongoing business, rather than on rent free periods from landlords provided by a legal loophole.”